BA 308B and LOM 408B/5330 Business Logistics Systems Course Home Page: James Campbell’s home page with link to BA 308B and LOM 408B/5330:

Chapter 1: Introduction Syllabus. Definitions. Scope of logistics. Activities. Key Trends.

Definitions Logistics - Logistics is that part of the supply chain process that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers' requirements. (CLM) Supply Chain Management - the systemic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole. (CLM) Logistics - Science of managing (controlling) the movement and storage of goods (or people) from acquisition to consumption.

Logistics - Science of managing the movement and storage of goods (or people) from acquisition to consumption. NOT concerned with Production. NOT concerned with Military Logistics. –Though many of same techniques and analyses are used for business and military logistics. Goods: Raw Materials  Final products, and everything in between. Logistics for services & people similar to goods logistics. –Police, fire, ambulance, passenger airlines, taxi cabs, etc. Definition

Logistics - Science of managing the movement and storage of goods (or people) from acquisition to consumption. Movement = Transportation (between locations). Storage = Inventory, Warehousing (at locations). Difference between acquisition and consumption is a matter of space and time. Focus: Best way to overcome space and time that separates acquisition and consumption.

Why Things Are Where They Are Why is St. Louis here? Why are New York, Los Angeles, etc. where they are? Why are some things produced in certain places - and other things produced everywhere? –See book example with VCRs and software (p. 4) Why are bananas for the USA grown in Central and South America, but oranges for the USA are grown in Florida and California?

Cost to grow (¢/lb) BananasOranges in USA in Central America Logistics cost (¢/lb) to USAto Central America from USA from Central America 20 5 Consume Consume in Bananas Total Cost in USA Central America grow in USA35 = = grow in Central America 30 = = Result: Grow bananas only in Central America Bananas and Oranges

Cost to grow (¢/lb) BananasOranges in USA in Central America Logistics cost (¢/lb) to USAto Central America from USA from Central America 20 5 Consume Consume in Oranges Total Cost in USA Central America grow in USA30 = = grow in Central America 35 = = Result: Grow oranges in both USA and Central America Bananas and Oranges

Inexpensive transportation: –Allows specialization in space. –De-couples supply and demand regions. –Increases availability and competition. Inexpensive inventory/warehousing: –Allows specialization in time. –De-couples supply and demand in time. –Increases availability and competition. Inexpensive Transportation and Inventory

SupplyProduction Consumption Scope of Logistics Transportation Information Physical Distribution Outbound Materials Management Inbound

52 Retail Outlets in USA... Retail Outlets

...served by 5 Warehouses Retail Outlets Warehouses Single stop and multi-stop routes SEA LA NY ATL CHI

2 Plants, 5 Warehouses Plants Warehouses P1 P2 SEA LA NY ATL CHI

Outbound Distribution System Retail Outlets Plants Warehouses 2 Plants, 5 Warehouses, 52 Retail outlets P1 P2 SEA LA NY ATL CHI

Inbound Distribution System Plants Warehouses Plants Supply Points Sub-assembly plants 9 Suppliers, 3 Sub-assembly plants, 2 Plants P1 P2 LA

Total Distribution System Retail Outlets Plants Warehouses Supply Points Sub-assembly plants 9 Suppliers, 3 Sub-assembly plants, 2 Plants, 5 Warehouses, 52 Retail outlets P1 P2 SEA LA NY ATL CHI

Total Distribution System 9 Suppliers, 3 Sub-assembly plants, 2 Plants, 5 Warehouses, 52 Retail outlets CUSTOMERSCUSTOMERS P1 P2 SEA LA NY ATL CHI

Transportation - Chapter 6 & 7. Inventory - Chapter 8, 10, 11, 12. Location - Chapters 13 & 14. Support Activities: –Customer service, order processing, packaging, warehousing, purchasing, materials management, information management. Logistics Activities

Supply chain integration. Information technology. Global markets and competition. Quality emphasis. Service industries. Product variety. Quick response. Disruptions, shortages, inflation, recession. Regulation. Security. Key Trends In Logistics

$1,000,000,000,000 per year –Spent on logistics in U.S. –10.1% of U.S. GDP Transportation % Inventory % Administration 0 - 5% Importance: $$$